In the first quarter of 2025, Vietnam’s construction sector witnessed an impressive rebound, with large-scale infrastructure projects revitalizing the domestic steel market. Favourable weather conditions, particularly during the dry season, played a pivotal role by facilitating uninterrupted construction activity, from residential buildings to highways. The Vietnamese government’s focus on infrastructure development, including the expansion of expressways, bridges, and airports, has spurred a surge in demand for steel products. As the country continues its ambitious urbanization agenda, steel consumption has been rising, benefitting leading manufacturers like Hoa Phat Group (HPG), which stands at the forefront of the steel industry.
Hoa Phat’s Q1 results reflect not only a recovering domestic market but also the group’s strengthened position as a regional steel giant. With a consistent focus on quality, innovation, and diversification of its steel offerings, Hoa Phat has managed to scale production to meet both current and future market needs. The growing demand for steel in construction, manufacturing, and automotive sectors has set a solid foundation for the group’s impressive performance.
Who’s Involved?
Hoa Phat Group, founded in 1992 and headquartered in Hanoi, is Vietnam’s largest steel manufacturer and one of Southeast Asia’s leading steel producers. The company has become a key player in the global steel supply chain, providing a wide array of products, including construction steel, hot-rolled coils (HRC), steel pipes, and galvanized steel.
The Vietnamese government’s strategic investment in infrastructure projects and a favorable regulatory environment has also been an important factor in Hoa Phat's growth. The government's commitment to large-scale construction and development, including expressways, industrial parks, and airports, directly drives demand for steel.
Hoa Phat’s recent Q1 results underscore the impact of these macroeconomic factors, positioning the group as a central player in both the local and regional steel markets. As a prominent Vietnamese-owned steelmaker, the company is pushing for greater self-sufficiency in high-value steel products and is accelerating its efforts to serve growing industrial demand both locally and internationally.
Q1 Output & Sales Performance
During the January–March period, Hoa Phat’s crude steel output rose by 25% year-on-year, reaching a staggering 2.66 million metric tons. The group’s overall steel sales surged 29%, totaling 2.38 million metric tons. This impressive growth was fueled by significant demand in core product categories such as construction steel, hot-rolled coils, and steel billets.
Among the steel categories, construction steel and high-quality steel products saw the most remarkable growth, with 1.19 million metric tons sold in Q1. This marks a 25% year-on-year increase. Hot-rolled coil (HRC) sales, another key product, grew by 23%, reaching 993,000 metric tons. Steel pipe sales shot up by 42%, reflecting increased demand from the industrial sector, while galvanized steel sales witnessed a 9% decline. The drop in galvanized steel can be attributed to oversupply in the regional market and shifts in demand towards higher-end steel products.
Breakdown by Product Segment
Hoa Phat's Q1 product portfolio reveals a diversified and well-balanced approach to steel manufacturing. The company’s flagship products—construction steel and hot-rolled coils—remain the primary drivers of sales, accounting for a majority of total sales volume. In particular, the sale of steel billets experienced a remarkable surge of 128%, reaching 198,000 metric tons. This increase highlights Hoa Phat's strategic move into producing higher-value steel products for niche markets, where demand is expanding rapidly.
However, not all segments performed equally well. Sales of galvanized steel products, which are typically used in construction, automotive, and industrial applications, decreased by 9%, possibly due to shifting market dynamics and increasing competition from other producers. This decline, while notable, represents a minor portion of Hoa Phat's overall portfolio, with the company relying more heavily on steel billets and HRC for growth.
Strategic Outlook & Product Expansion
Looking forward, Hoa Phat has clearly set its sights on advancing its product offerings into higher-margin sectors. The company plans to significantly increase the production of high-tensile steel products, such as tire cord and bead wire, cold-formed steel, and rolled steel bars. These products are indispensable in industries ranging from automotive manufacturing to industrial processing. This expansion reflects Hoa Phat’s broader strategy to move beyond traditional steel products and capture a larger share of specialized markets.
In addition, the group is actively diversifying its portfolio of steel products to meet evolving demand in key sectors. By focusing on high-value steel products, Hoa Phat aims to position itself as a provider of premium steel solutions, catering to the rapidly growing manufacturing base in Vietnam and the wider Southeast Asian region. This shift in product focus underscores Hoa Phat's vision to remain competitive in a market increasingly characterized by the need for advanced steel products.
Dung Quat II Project Progress
One of the most significant developments for Hoa Phat is its ongoing expansion project at the Dung Quat II Iron and Steel Complex. This $1.8 billion project is expected to be completed by Q4 2025, with a design capacity of 5.6 million metric tons of hot-rolled coils per year. Once operational, Dung Quat II will boost Hoa Phat's total crude steel capacity from 8.5 million metric tons annually to more than 14.5 million metric tons, cementing its position as the largest steel producer in Southeast Asia.
The Dung Quat II complex is not just a symbol of Hoa Phat's commitment to expansion, but also a reflection of the company’s strategic focus on modernizing its operations and diversifying its product range. Upon its completion, Hoa Phat will not only strengthen its foothold in Vietnam but also enhance its standing in the global steel market, potentially ranking among the top 30 steel producers worldwide.
Vietnam’s Role in Global Steel Dynamics
Hoa Phat’s impressive performance and ongoing expansion project mark a pivotal moment for the Vietnamese steel industry. As the only Vietnamese-owned company capable of producing hot-rolled coils (HRC), Hoa Phat is uniquely positioned to serve both domestic and international markets. The company’s strategic expansion and diversification are part of a broader trend in Vietnam’s growing influence in the global steel sector. With a rising demand for steel products in Southeast Asia and beyond, Hoa Phat’s ability to produce premium steel products puts it at the forefront of an increasingly competitive global market.
In the broader context, Vietnam is gaining prominence as an emerging hub for steel production in Southeast Asia. While China and India have historically dominated the region, Vietnam’s burgeoning steel industry, led by Hoa Phat, is carving out a significant niche in the production of specialized and high-quality steel products. This positions the country as a key player in the shifting dynamics of global steel trade.
Key Takeaways:
• Hoa Phat’s Q1 crude steel output surged by 25% to 2.66 million metric tons
• Total Q1 steel sales rose 29% year-on-year to 2.38 million metric tons
• Billet sales jumped 128%, while galvanized steel sales dropped 9%
• Expansion into tire cord, bead wire & cold-formed steel underway
• Dung Quat II plant to raise total annual capacity to 14.5 million metric tons
• Upon completion, HPG to become Southeast Asia’s largest steelmaker
